Wage Reimbursement Defeats Purpose Of Hike

April 12, 2013

New York business owners told the state a minimum wage hike would hurt.

The state listened to their concerns, but instead of leaving the minimum wage alone, it passed some of the increase on to taxpayers through a minimum wage reimbursement tax credit for students that will cost state taxpayers millions of dollars.

Employers will receive tax credits for seasonal student employees ages 16-19 who work at the minimum wage, which increases to $8 an hour in 2014 and $8.75 a year later. When the minimum wage hits $9 an hour in 2016, employers who take advantage of the tax credit will pay 40 cents of the increase, while the state's overburdened taxpayers will cover the remaining $1.35.

As Assemblyman Andy Goodell, R-C-I-Chautauqua County, told The Post-Journal recently, the credit will help some local businesses that rely on student workers during the summer tourism season, including big box stores and restaurants. However, the credit certainly won't help the county's adult workforce and the working poor, who will find it more difficult than ever to land an entry-level job. If raising the minimum wage is meant to help adult workers and their families, as Gov. Andrew Cuomo has suggested previously, then the tax credit program truly makes no sense.

Pair that with the fact that businesses will lose the credit if and when they bump an employee above the minimum wage, and raises for entry-level workers will be a thing of the past. Once a worker knows they'll never get a raise, what's their incentive to work harder and learn more skills?

Like the SAFE Act, the minimum wage hike is another example of New York slapping together an ill-thought-out plan in hopes of creating positive change.

The governor and his gang are riding a real losing streak - an unpopular gun law, failed ethics reform efforts and now a minimum wage that costs a large percentage of the state's businesses huge sums of money while hurting the working poor.